The company’s massive restructuring plan will include slashing nearly 10 percent of Ford’s workforce worldwide and discontinuing four car models.
“These are painful but necessary steps to make us competitive going forward,” Ford Motor Company Chairman and CEO William Clay Ford Jr. said Friday. “It is a comprehensive plan but it is not a magic wand.”
Ford employs about 345,000 people worldwide, including 170,000 employees in North America, and operates 47 plants in the region.
Ford’s North American operations will be reduced by nearly 16 percent, down to nearly 4.8 million vehicles from 5.7 million, Ford’s Chief Operating Officer Nick Scheele said.
The company will discontinue the Ford Escort, Mercury Cougar, Lincoln Continental, and the Villager models, none of which ever yielded major profits.
Assembly plants in Edison, N.J., Hazelwood, Mo. and Oakville, Ontario will close by 2003 or 2004. Ford parts plants in Brook Park, Ohio, near Cleveland, and in Vulcan Forge in Dearborn, Michigan could close even earlier if it works out an agreement with the United Auto Workers union.
Ford’s contract with the UAW bars plant closings, but is set to expire in Sept. 2003.
Ford, the world’s second largest carmaker, faced huge losses from the recall of Firestone tires last year. The company’s net loss for 2001 could be over $2 billion. The restructuring plan will cost nearly $4.1 billion to implement.
Along with three thousand job cuts last year, another twelve thousand hourly positions will disappear from North American plants in order to reduce the company’s operating costs amid the slowing U.S. economy.
Another 5,000 salaried positions will be cut through Ford’s early retirement program along with some 1,500 contract positions, said Scheele.
The Big Three carmakers, Ford, DaimlerChrysler’s Chrysler unit, and General Motors Corp., have all slashed nearly 10 percent of their US workforce this year. General Motors Corp. is the only Detroit car maker expected to post a profit this year.
Ford’s stock closed higher today at $15.50 after opening at $14.90.